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The shortage of multi-layer ceramic capacitors (MLCCs) will continue into 2019. Many manufacturers are making more capacitors over the next year as manufacturing electric vehicles, factory robots and other products make the parts harder to find.

These MLCCs are a very important part of many electronic devices, helping to control the flow of electricity to the semiconductors inside. Smartphones have hundreds of the tiny devices, and cars uses thousands in each vehicle.

The shortage is worsened by the small number of companies that produce MLCCs. Samsung Electro-Mechanics, Murata, and Taiyo Yuden are three of the largest manufacturers, with 60% of the total market. Murata plans to add another 10% of manufacturing capacity, while Samsung said it was overwhelmed and would stop new orders.

“The capacity increases the industry is installing will come close to the demand of today, but not the demand of tomorrow,” said Per Loof, chief executive of Kemet, on a conference call with analysts last month. “These capacity increases are lagging 18 months behind the demand.” He said that Kemet’s annual revenues would grow 12 percent over the next year, up from its previous guidance of five percent. “We can’t deliver more, but we’re delivering what we have,” Loof said. (source)

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The shortage is pressuring customers to consider alternatives, including tantalum-based polymer electrolytic capacitors, where the thickness and voltage allows. Manufacturers are having trouble fulfilling new customer orders and are boosting their MLCC prices.

John Sarvis, chief executive officer of AVX, is facing the same challenges. The Greenville, South Carolina-based company plans to manufacture 20 percent more capacitors—ceramic and tantalum—over the next year. “But what we're seeing there is the delays and the longer lead times and the equipment manufacturers now are kind of limiting our ability to expand at a faster rate,” he said on a recent earnings call. (source)

No one knows exactly how long the shortage could last. The Trump administration’s tariffs on Chinese imports could cool down production of electronic devices that use capacitors. The 25% tariffs impact certain types of capacitors, including a number of products manufactured by Kemet. The company said that it would charge customers to cover the additional costs from the tariffs.

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With 40 years in the industry, Advanced MP Technology understands the potential impact of new applications on the global electronic component market. By following the technology trend closely, Advanced MP Technology ensures that we stay in front of the industry curve to provide our customers the best support they need at any time.